March 2004

Surcharge Capabilities Introduced Into Metal Companies’ Software

Marlborough, MA— AXIS Computer Systems, Inc., a provider of software for the metals, wire and cable industries, announced the immediate availability of enhanced surcharge capabilities in the AXIOM® Enterprise Resource Management System. The new invoicing features are designed to help metals producers, processors, and service centers better manage the current rapid rise in costs for raw materials such as scrap, coke, iron ore, freight, alloys, and energy.

While metal producers and processors are working aggressively to reduce operating costs, in the current market of rapidly rising raw material and energy costs, most are forced to increase prices. In turn, most processors must increase their prices as well. The Wall Street Journal reported in January that U.S. steelmakers boosted first-quarter prices on benchmark hot-rolled steel to $350-$370 a ton, an average increase of 12% over the December price of $320 a ton. Higher prices are also estimated for the second quarter. Steel companies have cited ‘extraordinary increases in raw material costs’ as the primary reason for their increases.

When increased costs cannot be absorbed with normal pricing, metals companies often add supplemental surcharges to current contract prices and adjust them each month based on changes in raw material costs. This process creates administrative challenges, since allowable surcharges may vary by customer and raw material costs can change dramatically from one month to the next.

In anticipation of the current environment, AXIOM’s new automated surcharge capabilities were developed and deployed in cooperation with customers in less than 30 days. The enhanced capabilities enable AXIOM users to implement across-the-board surcharges without having to intervene at the time of invoice creation, and allow for overrides by customer, sales order, or invoice.

“We worked closely with representative AXIOM customers to define exactly what was needed at each level of the metals supply chain, then made it a priority to get the new capability developed and available,” states Gerry Espe, AXIS Product Development Manager. “Having this capability quickly means hundreds of thousands of dollars to some of our customers; in some cases, millions of dollars.”